Delhi/Mumbai Aug. 17: Cairn Energy chief executive Bill Gammell today met oil minister Murli Deora to explain the rationale for selling a controlling stake in Cairn India to Vedanta Resources, which separately announced that the open offer to acquire a 20 per cent stake in Cairn India Ltd would commence on October 11 and close on October 30.

The government has a production sharing contract with Cairn India that has raised a regulatory doubt over the deal, under which Anil Agarwal’s Vedanta will acquire 51 per cent to 60 per cent of Cairn India for $8.5 billion to $9.6 billion in cash.

“We will seek the government’s endorsement and necessary consents or approvals that are needed. We are not exiting entirely and will retain a significant minority stake that will enable us to benefit from future potential in India. We will continue to work in partnership with the new majority owners to ensure a smooth transition,” Cairn Energy said in a statement today.

After the talks with Deora, Gammell held separate meetings with oil secretary R. Sundareshan and ONGC chairman-cum-managing director R.S. Sharma. The PSU is Cairn India’s partner in the Rajasthan oil blocks.

“We had friendly and open discussion with the (oil) secretary about the proposed transaction,” Gammell said after the meeting with Sundareshan.

Sharma said ONGC would “not be making any counter bid” and were “evaluating the stake deal” with Vedanta

Fitch Ratings today downgraded its long-term issuer default rating and simultaneously placed it on rating watch negative. Likewise Moody’s Investors Service placed the ratings of Vedanta on review for a possible downgrade.

Analysts are divided on whether shareholders of Cairn India should accept the open offer to be made by Vedanta arm Sesa Goa.

The open offer price of Rs 355 per share had led to some concerns that it is discriminating to shareholders as a higher price is being paid to Cairn Energy Plc.

“We believe that the open offer price of Rs 355 per share is an attractive proposition for the Cairn India shareholders and should tender the shares,” brokerage Motilal Oswal said.